Monday Feb. 1, Premarket Analysis
Today in the Stock Market
Dear Fellow Traders
*** We have another explosive PICK this morning so make sure you are on our lists…
The market can not seem to hold on to any gains as the bears remain firmly in control of the price action. A surprise in fourth-quarter GDP could not even provide any support as the Dow Jones Industrial Average is close to breaking below a key psychological area. On Friday the DJIA closed down over 50 points to end the day at 10,067.33. This was the lowest close since Nov. 6. A break below 10,000 could lead to a test of the Nov 2 low of 9,647. The trading could be relatively quiet for the rest of the week as traders and investors wait for the employment numbers to be released on Friday. A strong employment report, coupled with strong fourth-quarter growth could help the market find some support at its current levels.
The overall market pessimism is also affecting the tech sector. The NASDAQ is unable to find any traction as it continues to lose ground. QQQQ, the ETF of the NASDAQ Composite broke through all its recent support areas and ended the week at its lowest level since Nov. 6. The ETF lost 76 cents on Friday to close at $42.79. I think it is realistic to expect the ETF will test the Nov. 2 low of $40.64 unless nov 27th pivot at 43 finally act as a support area.. . Even positive earnings are not helping to boost optimism in the market. Although we are only just halfway through the earning season a lot of market participants have priced in further weakness in 2010.
The U.S. dollar continues to dominate the commodity market and gold prices in particular. Last week GLD, the largest gold ETF, found some support above $106. And for the first since November it closed below that price. On Friday it ended the week at $105.96. The U.S dollar however finished the week at its highest level since July 30, 2009. As long as the greenback remains strong commodities will find it difficult to move higher.
Although gold prices are struggling, investors continue to see some value in junior gold stocks. For most of the week our gold pick, AGCZ has been under pressure but managed to recover some of its recent losses. On Friday the stock hit a low of $0.11 but that created a strong buying signal as the stock was pushed higher to close the week at $0.26. The volume was okay and other push higher could cause the stock to consolidate around $0.30 until gold prices find some support and with the news that went out over the week-end AGCZ could finally resume it’s move up.
Our latest pick BPAC is showing some sign of strength. Low volume on Friday has created some volatility in the stock. BPAC hit a low of $48 cents but managed to rally back and close up at $0.55, which is acting as a near-term resistance level. We are expecting a break of $0.55 which will probably cause the stock to test it’s recent highs of $0.66.
RVBF had a strong day on Thursday but was unable to hold those gains as investors were quick to take profits off the table. The stock started Friday at $0.13 but the selling pressure caused it to close at $0.08. I am expecting once again to see another consolidation period around this level. $0.08, $0.07 and $0.06 have acted as interesting support areas for this stock.
Some people have also asked for an update on KNDR. Not much is happening with this stock. Early last week the stock broke through its support at $0.06 and now it is trading in a range with support at $0.04 and resistance at $0.06. I think we need to see a very strong jump in volume for this stock to push higher.
The last stock I want to mention is HSCO, again this is an illiquid stock, which increases volatility, so traders should be careful and take smaller positions. The stock is making an interesting pattern. As soon as the price drops to its low buyers quickly jump in and drive the price back up. The price slowly trended down last week but I think we could see a relatively big move if the price moves back towards $0.70, which was the price that initiated a 60 cent rally in the stock Jan 20 and 21.
And as for BYSD…i will give it a second shot when i see the reversal confirmed, will let you know then but we need to see a few things before i fell it’s safe to reenter this one. Took a loss on the first trade, but it doesn’t mean it cannot be good for a second time….
Have a great Trading Day!
3 Responses to “Monday Feb. 1, Premarket Analysis”
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MRNJ very active
Francis, where’s the pick? You stated 9:31. I still have not received it. I have asked plenty of times how I get on your quick list. Please let me know. Mike.
nice post. thanks.